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How To Find and Source Products for Amazon FBA

June 04 2021 02:01
Winnie
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Selling products on Amazon FBA (Fulfillment by Amazon) is one of the best businesses. All you need is to get great products and let Amazon fulfill your orders and handle returns.  The main challenge people face in selling their products on Amazon is sourcing products to sell. Veteran sellers have found different methods of sourcing inventory and shared their experience so that novices can get started trading on Amazon FBA. Let's explore some of the most common sources of Amazon inventory.

Where To Source Products for Amazon FBA

When you need to get stock for your dropshipping product, try either or combining the following methods to get products for Amazon FBA.

Dropshipping

Amazon FBA is a very lucrative business, with over 50% of the orders on the platform coming from third-party sellers. 34% of all the orders were fulfilled from dropshipping, which accounted for $95.37 billion in 2019. The method is very popular and low risk to the FBA seller. It reduces the cost of purchasing inventory upfront hence reducing storage and shipping.

Dropshipping suppliers purchase or manufacture goods and store them in their warehouses. Once an order is placed on Amazon, the dropshipper packages it and ships it to the Amazon FBA warehouse. Once the transaction is completed, you can pocket the margins between the price of the product from the dropshipper and the price you retail on Amazon. Common dropshippers are Oberlo, China Brands, SaleHoo, and Doba.

You must beware as dropshipping means you do not have total control over the inventory and may experience issues such as customers receiving substandard products or the supplier running out of stock. Some dropshippers have tools like automatic stock management that helps you keep tabs on the inventory and a dedicated customer care and quality control team to support your business.

Wholesale Suppliers

Wholesale suppliers can help provide a large inventory of goods at a lower price that can easily be resold for a profit. Since wholesalers cover a large geographical area, they have a large selection of goods that you can pick for the Amazon store. Once you establish a good business relationship, it is possible to negotiate discounts and better terms of payment with the wholesaler.

You have, however, to have storage space for your product and ensure you have the necessary permission to resell a product for branded products. Amazon may pull down your store for copyright infringement if you retail a product you do not have a right to sell.

Market research should be conducted diligently when opting for this method as it can cost you when you have deadstock a slow-moving product that requires storage space. You can test the market by having smaller quantities before proceeding to acquire large quantities.

Online wholesale Directories and B2B MarketPlaces

Millions of products are launched yearly by manufacturers and their suppliers on wholesale directories and B2b marketplaces. Since you will be dealing with manufacturers or their representatives, the prices can be very low and guarantee huge sales margins. These avenues are very convenient as they allow you to browse through thousands of suppliers and brands in different niches and choose premium quality and fast-selling products.

Minimum Order Quantities (MOQ) in some of the B2b market places means that you need lots of cash to purchase your inventory, but the potential margins make it worth it. The most popular B2Bmarketplace and wholesale directory is Alibaba. One needs to be observant when doing business on these platforms as they are rife with scammers when the platform is neither reputable nor doesn’t conduct an audit on its suppliers. Reviews can give you a headstart as well as the platform’s verification of the supplier.

Manufacturers

manufacturers want to sell their inventory quickly and are the cheapest option when looking for new premium quality products. Contacting manufacturers directly can give unique products and give room for product customization and branding. Because of the low cost per unit, manufacturers tend to have large MOQs that make it suited for large businesses with more financial muscle and storage space.

Retail and Online Arbitrage

Arbitrage is defined as the simultaneous buying and selling of the same good in different markets to pocket the difference. One can visit local retailers and get lowly priced goods and list them on Amazon. But how can one get lowly priced goods?

You can walk into any local store like Walmart and look for the clearance isles for markdown on many items. Be on the lookout for any hot deals, crazy discounts, and huge discounts at the local shopping mall, and get your Amazon FBA inventory at a fraction of the cost. Buy the discounted merchandise for resale and make huge profits.

 The strategy is effective for limited edition items and collectibles. It is also less risky than stocking large inventory that could become deadstock. You can visit the online shopping stores for a similar experience. Some local stores may label commodities as discounted to make you buy at the normal price, so keenness is key. The method is very competitive and may be difficult restocking as some offers are seasonal.

Sell your Own Products

Do you have a talent for weaving, making furniture, creating a particular, or have your own factory? Well, it is possible to list your own creations on Amazon and get a ready market for your products. This method gives you total control of the product, quality, and inventory. You can get assistance in packaging products. Trademarking your products can help protect you from counterfeits when working on Amazon FBA.

Liquidation/Thrift/Surplus Stores Or Auctions

You can buy high valued goods at throw-away prices from auctions, garage sales, and thrift stores. The items are primarily overstocks, donated wares, inventory from closed down businesses, or clearance items.

Make your calculations in advance to ensure that it is possible to have a profit margin after settling the fulfillment costs. A keen eye is necessary to ensure you get goods that are valuable and in a saleable condition. eBay can be a great alternative if you cannot make it to a physical auction.

Virtual Assistants and Sourcing Agents

Your schedule may be too tight, or sometimes you may have a hard time sourcing products for Amazon FBA. You can hire a virtual assistant who will use any or a combination of the other sourcing methods to get your inventory. Sourcing agent websites research and find the most profitable products or manufacturers and negotiate the price logistics and shipping for a commission.  You, however, have to take this service with caution as some of the agents may just be after a commission and not getting you the best products at the right prices.

Tips To Source Products for Amazon FBA

Before sourcing a product, it is good to compare its different aspects before spending your money on it. You can begin by checking the demand for the product using free tools like Google Trends to see the most trendy product. Evaluate the competition to ensure that you can effectively challenge similar products listed on Amazon. If Amazon stock the product through a private label, then you’ve got an uphill task to compete against Amazon. However, products with low competition may not be profitable at all.

You join Amazon FBA to make a profit, so any product that does not guarantee good profit margins may be draining. You may require to sell many units of low product margins to make any profits. Try to evaluate the product’s price on different sourcing methods to get the highest Profit margins. Evaluate between stores and compare the same products to avoid compromising on quality.

When sourcing for products, it good to go through Amazon’s terms and conditions to understand the dos and don’ts when making an Amazon listing. Some products require only people from the United States to sell, such as pesticides, while goods such as CBD oils are restricted. Knowing valid products can save you from losing money on inventory you cannot sell on Amazon.

Shipping costs can greatly affect the final price of a product and the profitability of goods. It is wise to go through the shipping cost of your potential source markets to ensure they do not eat into your profits. You can also focus on small, lightweight objects that are cheaper to ship to the Amazon FBA store.

Use technology and automation with great online tools to conduct market research get products and potential suppliers. The App can help you decide when to buy inventory and maximize profits. The apps can help automate the entire sourcing and research process for a more streamlined experience. The most common tools are :

●      Jungle scout

●      Inventory Lab

●      Helium10

●      camelcamelcamel

●      Amazon Scanner App

●      SupplySpy

●      Amazon FBA calculator

Some of the inventory sourcing methods work best for beginners, while others require established brands. It is wise to evaluate where your business falls to settle for the most effective method. It is good to start small and evaluate the effectiveness of each method before slashing your money on the sourcing methods.

You can inspect the goods for quality and ensure that they meet the right standard before putting the goods for sale on amazon. One way to ascertain product quality is to get a sample before listing your product on Amazon to avoid dealing with unlimited customer complaints and a sizeable unsellable stock.

Amazon FBA presents an opportunity to trade goods and advantage of its huge market. There are unlimited methods of sourcing Amazon inventory stock, weigh each option on its merits and demerits, and choose the option that works best for your business.